Market data can be a fast, reliable, and cost effective way for hospitals and health systems to benchmark their contract rates.

Database construction and maintenance can mean the difference between accurate and inaccurate benchmarks. Does the survey firm have rigorous collection and verification standards, and do they audit reported data? How often do they survey? Do they survey a variety of physician and hospital ownership types? Is all of a facility’s contract data collected or only ad hoc data? Look for consistent reporting methods, comprehensiveness across specialties and positions, thorough explanations of statistical calculations, and readily available demographic information on hospitals reporting data. As a subscriber-based survey, MD Ranger collects all of a facility’s data, meaning we report on percent of facilities paying, as well as ensure that a variety of facility types are represented in our benchmarks.

Does your organization pay physicians above and beyond to take call over the holidays?

According to our database, some – but not very many – do. Out of over 1,400 current call arrangements, only 4.4% have a holiday differential that pays physicians a different rate for for holidays than for other days of the week. In fact, the per diem for a holiday averaged 43% more than the non-holiday per diem.

These contracts represent contracts with more than five times that many doctors since MD Ranger only counts one contract rate per facility per benchmark.

In terms of total annual payments, call contracts with a holiday per diem pay out a total of 10.6% more than contracts that do not include a holiday per diem. In other words: holiday per diems do have an impact on your overall physician contracting costs. Adding a holiday pay component can sometimes be a good strategy for minimizing a contract increase rather than increasing payment every day of the year.

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Market data can be a fast, reliable, and cost effective way for hospitals and health systems to benchmark their contract rates.

To be effective, market data should be based on an adequate sample size. OIG Stark guidelines suggest that market data should include a minimum of five providers. Some surveys interpret five providers to mean five individual physicians; however, MD Ranger takes a more conservative approach that results in a more robust data set. We only report benchmarks comprised of at least five different hospital owners/corporations, regardless of the number of facilities they own. This results in benchmarks based on larger, more diverse, and more reliable datasets for setting physician contract rates. Many of our benchmarks include dozens of hospitals that represent rates paid to hundreds of physicians. Regardless of the data source you choose, a large sample size with diverse participants is key.

Do regions affect physician payment rates? While many hospital executives answer with a resounding yes, consultants with nationwide practices often feel that variance by region is overplayed.

With the growth of its customer base, MD Ranger has considerable geographic diversity, with hospital contracts from 27 states covering dozens of MSAs, rural and urban areas. To investigate possible systematic variation, we pooled all MD Ranger’s contract data, over 10,000 records, and then joined it to data from various state and federal agencies, including CMS cost report data, BLS Occupational Employment Survey, various BLS price indices, etc. A multivariate approach modeled contract rates on hospital, contract, and market characteristics, and both linear and nonlinear techniques were employed. After extensive testing of a variety of geographic clusters defined by MSA’s and combinations of MSA’s, along with urban/rural distinctions, MD Ranger data scientists found no statistically significant geographic variation. More important factors influencing rates are trauma status, whether the hospital is urban or rural, and its size.